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Last Update: January 2015

Commentary on the recent development of price indices

In December, the FAO price index for oilseeds remained virtually unchanged, while the indices for oils and oilmeals dropped by 2.6 percent and 6.5 percent respectively from their November level. Compared to December 2013, all three indices saw a marked decline of 18 – 20 percent.

Regarding the markets for oilseeds, in December 2014, international soybean prices averaged below the level recorded in the last few years, reflecting expectations for a record-breaking global soybean harvest in 2014/15. During the second half of the month, soybean values firmed somewhat on concerns over increasingly dry conditions in certain growing areas of South America and on higher than expected import demand by China, the EU and several other buyers. Quotations for sunflowerseed and rapeseed remained relatively firm, reflecting recent downward revisions for crops harvested in Eastern Europe and Canada.

The month-on-month drop in the price index for vegetable oils (4.2 points or 2.6 percent) mainly mirrors developments in the market for palm oil, the most widely traded vegetable oil. The recent slump in crude oil prices depressed demand for palm oil as a biodiesel feedstock, causing a sizeable drop in palm oil values. Only towards the end of December, palm oil prices appreciated again, as excessive rains slowed down harvesting and crushing operations in Malaysia, amid higher than expected global export demand. International quotations for soy, rape and sunflowerseed oil weakened during December, mostly influenced by the decline in crude oil values.

Last month’s fall in the oilmeal price index (by 15 points or 6.5 percent) was mainly the result of lower international soymeal values. Reports of all-time high crushings in the United States in December and the prospect of another record-breaking global crush this season, combined with the confirmation of ample global feedgrain supplies, have driven international soymeal prices to 3-year lows.

 

Components of the oilseeds price index: Soybeans, US, cif Rotterdam; Copra Phil./Indo., cif NW Eur. port; Rapeseed, Europe, 00, cif Hamburg; Linseed, Canada, No.1, cif NW Eur. port; Sunseed, EU, cif Rotterdam (please note that sunseed has been added to the index only in January 1976).

Components of the oils/fats price index: Soybean oil, Dutch , fob ex-mill; Sun oil, EU, fob NW Eur. port; Rape oil, Dutch, fob ex-mill; Groundnut oil, any origin, cif Rotterdam; Cotton oil, US, PBSY, fob Gulf; Coconut oil, Phil./Indo., cif Rotterdam; Palmkernel oil, Mal./Indo., cif Rotterdam; Palm oil crude, cif NW Eur. port; Linseed oil, any origin, ex-tank, Rotterdam; Castor oil, ex-tank Rotterdam.

Components of the meals/cakes price index: Soy meal, 44/45%, fob ex-mill Hamburg; Sun pell., 37/38%, Arg., cif Rotterdam; Rape meal, 34%, fob ex-mill Hamburg; Copra exp. pell., Phil., domestic; Palmkernel  exp., 21/23%, cif Rotterdam.